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October 23, 2007Canadian funding for greener industry in Egypt

Vancouver, Canada (GLOBE-Net) - What started as a Canadian-funded development project in Egypt has spiraled into a highly successful business venture that not only is curbing high levels of greenhouse gas emissions, but also is providing a boost to local industry.

The mud brick industry in Egypt has existed for centuries, and remains a primary source of building material for the country today. Unfortunately, its legacy is also responsible for high levels of air pollution in urban areas and an alarming volume of greenhouse gas emissions.

According to a World Bank Energy-Environment review conducted in 2003, Egyptian industry accounted for over twenty percent of the damage costs resulting from air pollution in the country, a much greater proportion than what is caused by transportation or by the burning of biomass. By 2004, air pollution was so severe that the city's massive and ancient statue of Ramses II was removed from Cairo's city centre to protect it from environmental damage.

However, owners of mud brick factories in Egypt recognized an opportunity to maintain the strength of their industry minimizing their industry's environmental impacts. By switching to natural gas from the tradition of burning heavy oil, the factories can reduce their greenhouse gas emissions by up to 37 percent.

The Canadian International Development Agency, through a project entitled the Climate Change Initiative, agreed to fund part of the internal infrastructure needed for a pilot project to convert 50 mud brick factories to natural gas. The Egyptian Ministry of Petroleum and a local gas distribution company funded the remainder of the infrastructure costs.

Traditionally, Egyptian factories create bricks by burning mazot, a byproduct crude oil. Mazot is piped into kilns and lit on fire to bake piles of stacked bricks. Unfortunately, burning mazot creates both heavy smog and high levels of greenhouse gas emissions. With Cairo alone employing close to two hundred mud brick factories, this amounts to significant levels of pollution.

The pilot project, which completed in 2006, showed promising results. Converting to natural gas not only offered enticing environmental benefits for Egypt, but importantly, also translated into economic gains for the mud brick industry. Within one year of conversion, factory owners were able to recover all costs associated with making the switch. Beyond the first year, factories also began to save 22% in monthly operating costs.

The emissions reductions associated with the fifty factory conversions were equivalent to taking 300 000 vehicles off of Cairo streets. Evidently, the project also created visible improvements to the city's air quality, with industrial areas now visible from much further away than before.

The success of the project quickly captured the attention across the industry. Over 300 Egyptian mud brick factories are now planning to switch to natural gas, as part of a venture run by Idea Egypt, a local firm in Cairo. Private investors, many of whom are Canadian, will fund 30 million of the 46 million dollar project, promising additional reductions in carbon emissions and more improvements to local air quality.

The shift in the industry towards natural gas stands to create opportunities for Egypt to meet goals established under the 1997 Kyoto Protocol to the United Nations Framework Convention on Climate Change.

The Clean Development Mechanism (CDM), a process associate with the Protocol, permits industrialized nations to meet agreed targets for greenhouse gas reductions by investing in projects that cut emissions in developing countries. Obtaining CDM approval will allow Idea Egypt to trade Certified Emission Reductions as carbon credits on the international market, generating revenue for the country and helping move the global sustainability agenda forward.

With benefits beginning at the level of local industry, and extending as far as international objectives, the Climate Change Initiative indicates a hopeful reality: efforts to generate environmental progress can travel hand-in-hand with economic success.